Silicon Works, first after becoming an LG affiliate, to produce chips at Samsung foundry

Yy Lee

승인 2019.04.26 09:34

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The non-memory "win-win model" was actively promoted during President Moon’s visit on the 30th

Silicon Works, LG Group’s fabless semiconductor affiliate, plans to mass-produce chips at Samsung's foundry. Experts evaluate that this move is meaningful because it is the first win-win cooperative effort in the field of semiconductors between Samsung and Silicon Works since Silicon Works became an LG affiliate.

On the 30th, President Moon Jae-In is scheduled to visit the Samsung Electronics Semiconductor Factory. It has been reported that Samsung will actively inform government officials about such a model of mutual growth among domestic companies.

According to industry sources on the 22nd, Silicon Works has recently delivered a design completion file (or Graphic Data System, GDS, file) after deciding that it will produce chips at the Samsung Electronics 200mm foundry. Mass production is expected to commence soon. The exact product line to be produced is unknown, but it is said to be a non-display driver IC (DDI) product.

Industry experts say that it is “unusual” to see Silicon Works, an LG-affiliated company, to use a Samsung foundry. Silicon Works has previously handed over some digital semiconductor production to Samsung Electronics. However, since its incorporation into the LG Group, it has asked only SK Hynix, Global Foundry, UMC, and TSMC for chip production.

An official said, "The foundry’s production is meaningful in terms of cooperation between affiliates of two domestic electronics companies." Jung Eun-Seung, head of Samsung's foundry business (CEO), has reportedly been conducting foundry sales activities by meeting with Son Bo-Ik, CEO of Silicon Works, via various routes.

However, Silicon Works plans to use its existing production site for DDI, its main source of revenue. This is because the System LSI division of Samsung Electronics competes with Silicon Works in the DDI field. "If a company has a process that we want and if they can supply it for a long time, our current ideology is not to dismiss specific production areas," a Silicon Works official said.

Samsung Electronics has opened its 200mm foundry factory to small and medium-sized companies since 2016. This is the so-called 'open foundry' strategy. The main motivation behind this was to escape from the revenue structure relying mainly on one or two large companies such as Apple and Qualcomm. At the same time, it also aimed to strengthen cooperation with the domestic non-memory semiconductor industry. To this end, the company has started a multi-project wafer (MPW) service. MPW is a service that produces many semiconductor prototypes for a single wafer. Because the cost of wafer fabrication is shared among many companies, the cost of prototype production can be reduced.

The results were noteworthy. Existing domestic customers such as Telechips, Nextchip, Pixelplus, Dongwoon Anatech, ABOV Semiconductors, which are semiconductor fabless companies, are producing or preparing for production using Samsung 200mm foundry process. Samsung Electronics plans to gradually increase its production capacity from the early-200,000 wafers per month to 300,000 wafers per month as its customer base is expanding.

A fabless industry official said, "We have been struggling with expensive and difficult-to-communicate Taiwanese and Chinese foundries. We hope that Samsung keeps its foundry factories and processes open to small and medium-sized companies for a long time."

Samsung Electronics is reportedly planning to emphasize the win-win partnership activities in the non-memory sector to President Moon Jae-in, who plans to visit the semiconductor plant on the 30th.